Telehealth, also referred to as telemedicine or virtual care, is top-of-mind for most healthcare executives today. Providers are scrambling to deploy virtual visit technology and competing to become the most attractive option to patients. For an industry that has historically relied on in-person delivery of care, this marks a major shift.
Some might be tempted to herald telehealth as the future of the industry. After all, virtual visits offer consumers convenient, on-demand access to care and reduce overhead costs. In fact, virtual visits would seem to make in-person visits obsolete for most routine cases, reducing the need for a large network of clinics.
While telehealth may be an important part of the healthcare industry’s future, it is not the entire future. Here’s why.
Lessons from the Retail Industry
The situation facing the healthcare industry today is similar to the situation that faced the retail industry over the last two decades. With the advent of online retailing, many proclaimed the death of brick-and-mortar stores.
What happened to the retail industry? Rather than moving to an entirely online, “pure play” business model, smart retailers moved to an integrated, multichannel business model – one that allows consumers to shop anytime, through whatever channel they prefer.
The power of a well-executed multichannel strategy cannot be denied. Bloomberg reports that online retail startups like Warby Parker, UntuckIt, Bonobos, Madison Reed, and Amazon Books are now rolling out aggressive strategies for brick-and-mortar expansion. Why? Because despite the advantages that online retailing provides, it cannot entirely replace the benefits of a physical store. Stores provide instant gratification, a richer experience, as well as the opportunity to test merchandise before purchase. More importantly, stores yield critical impression frequency that helps prevent brands from being lost in a sea of competitors on the web.
This is further validated by actual consumer behavior. Despite the tremendous growth in online retailing, the U.S. Census Bureau reports that just 11.2 percent of total retail sales occurred online in the third quarter of 2019, and many experts predict that e-commerce sales will peak at around 20 percent of total sales. While business shutdowns during the COVID-19 pandemic altered shopping patterns, consumer traffic patterns began returning to normal as lockdowns lifted.
The bottom line: technology offers a powerful new means of providing goods and services, but it is not the only means of reaching consumers. In the retail industry, distribution channels were not replaced; they were multiplied.
Healthcare’s Multichannel Future: Telehealth + Office Visits
We believe the same patterns that were observed in the retail industry will be true in the healthcare industry. Ultimately, access – being the most convenient healthcare option available – will be the key to success for healthcare providers rather than strength in any one channel.
Healthcare providers need to understand the differences in the types of consumers who are likely to use virtual visits, those who are likely to rely on in-office visits, and those who may use both channels. By understanding who these consumers are and where they are concentrated, healthcare executives can make more informed decisions about the appropriate number of physical offices by market and the appropriate marketing spend to promote virtual health services in each market. The magic ratio of office visits to virtual visits may look different for each provider based on their unique consumer base, which means that market research is critical for success.
This also means that healthcare providers shouldn’t overlook the importance of their real estate strategies as they consider future growth opportunities. Barring events like the COVID-19 pandemic lockdowns, the majority of visits will still occur in office for the foreseeable future, so it is worth the time and attention to ensure that these offices are in the optimal locations and staffed appropriately.
The Bottom Line
Telehealth will grow in importance over the coming decade, but it is just one component of the healthcare industry’s future. Healthcare providers need to consider how virtual care fits into the larger strategy of patient access in order to succeed.
Want to grow consumer access to your healthcare company through a variety of channels? Buxton’s consumer analytics can help. Learn more about our work in the healthcare industry, and then contact us to discuss your specific needs.
